Ethereum (ETH) is one of the most popular blockchain platforms in existence. Behind Bitcoin, it tends to stay in second place on the market cap charts at any given time. Ethereum popularized the term, smart contracts, houses a network for ERC-20 tokens, and provides a framework for building decentralized applications. That said, the internet is now filled with new digital platforms, many of which are vying for Ethereum’s number two spot and the chance to become the go-to smart contract platform. We’re going to break a few of them down here.
Ethereum Classic (ETC)
Ethereum Classic resulted from a fork in the original Ethereum Blockchain which created two competing chains.
The fork came out of a user exploiting Ethereum’s plan to create a venture capital fund for every future application on the system. This plan was called the Decentralized Autonomous Organization (DAO), and it was essentially a complicated smart contract. It allowed any app idea to be voted on by token holders. If an idea was received positively, it was given the necessary funds to start development.
Unfortunately there was a problem with the DAO code which a hacker took advantage of and managed to steal $50 million worth of Ether (Ethereum’s form of currency.) This sent the price way crashing down and caused a lot of uncertainty around the Ethereum project as a whole. It is one of the biggest hacks in blockchain history.
A hard fork was proposed by Vitalik Buterin and the Ethereum foundation, the idea was to make the attacker’s Ethereum chain worthless and abandoned while the rest of the community moved to the new chain. The perk of this approach was that victims of the hack would have the equivalent amount of ETH (well, technically DAO tokens) returned as they had originally put into the DAO.
There is some division in the community about this fork. The thought of a hard fork when “code is law” was outrageous to some in the community. Accordingly, the faction that disagreed with the fork splintered off and became backers of the old, newly-dubbed “Ethereum Classic” chain.
To this day, Ethereum Classic now functions as it’s own entity and retains the original code from Ethereum including the ability to run ICOs, host smart contracts and everything else that goes with it.
NEO has been called the “Chinese Ethereum” of the cryptocurrency world, due to how similar people say they are. It is the first open-source blockchain network to launch in China. Both NEO and ETH offer a decentralized network and platform for smart contracts to be activated without any third party meddling. They’re both great at doing that as well, but they do have some significant differences.
For starters, NEO is much more scalable than Ethereum is. It can process more transactions at once, significantly reducing wait times for its users. While Ethereum’s developers are working on expanding the network’s scale, it doesn’t come close to NEO’s 1,000 transactions per second.
NEO wants to prevent any random hard forks like the Ethereum/Ethereum classic debacle, so it is coded to avoid this entirely. While soft forks are still possible, hard forks are not.
Finally, NEO coins are not mined. Instead, token holders are given NEO GAS, which is a dividend of NEO coins and can be received in any suitable NEO Wallet which supports GAS.
Stratis supports C# and is also compatible with Microsoft’s .NET framework. It is a “Blockchain as a Service (BaaS)” platform that allows companies to create their own custom decentralized applications. The focus is on streamlining the development process and ensuring new projects are private and unique to the company in need.
Companies won’t have to build a complicated and expensive blockchain framework to take advantage of the technology. Stratis does it for them. Also, Stratis has features like smart contracts and will soon be offering their first ICO on the platform, putting them in competition with Ethereum.
LISK uses something called a side chain paired with a Software Development Kit (SDK.) With this, developers can create their blockchain – and application – and tie it to the main LISK blockchain which keeps everything secure.
Side chains are a smart idea because they act independently from the main blockchain that powers the entire network. Anything that happens on the side chain does not affect the main chain. It allows developers to have full control over their network while still being maintained by a stronger and more secure framework.
EOS wants to be the best of all worlds in cryptocurrency. Essentially, EOS combines the security of Bitcoin and the smart contracts and dApp support from Ethereum (among other technologies) to create the ultimate scalable blockchain platform.
Anything a decentralized application dev team may need, EOS plans to have it for them. Shared databases, authentication systems, account recovery, cloud storage and hosting, potentially infinite scaling, all paid for by staking money in EOS tokens. Companies can create monetization and service strategies for their users, all with the provided framework.
The EOS community participates by voting on which applications are running properly or if any changes are needed to the source code. Nothing is done without the people’s approval on EOS.
Blocks are structured into “cycles” that are sequentially verified, reducing latency on the network and keeping performance high at all times. EOS tokens provide no function other than as a stakeholder for both developers and community members.
Waves is a unique platform because it provides a network for which developers can create tokens for any project they can think of. Also, it offers a decentralized exchange, DEX, for trading your newly minted coin with other coins on the Waves network. DEX uses an automated formula to make orders as terms are met.
The custom tokens are known as CATs and can be utilized just like any other cryptocurrency coin. Users buying with fiat currency will need KYC verification, but any crypto to crypto transfers are anonymous. It is arguably one of the most accessible platforms to launch an ICO on, especially with the provided decentralized exchange.
Tokens are staked via a leased proof-of-stake system, meaning that users can lease their tokens to a full node that runs the network. The higher your stake, the more you say you have in the Waves system. If you have 10,000 tokens, you can run a full node, which helps keep the network running and secure.
Waves also functions as an ICO platform, having held many successful token sales at this point and they are currently planning their Smart Contract language which will be introduced later this year. Waves is aiming to be a complete Blockchain platform at this point bringing together token creation, ICOs, smart contracts, trading and more.
And finally we are throwing a wild-card, Chainlink, while not designed to be a competitor in of itself with Ethereum, it is working on technology called Oracles which if successful could be the missing piece of the puzzle for all these smart contract platforms. An Oracle is something which can bring in data from outside sources and connect it to the Blockchain. Think of stock prices, bank transfers, the weather, fiat currency conversion rates, crash data from cars – all of this information is currently not available on the blockchain but with Chainlink, it could be, and that could be absolutely huge.
A great point of Chainlink is not, only providing this external data, but decentralizing it so you are not relying on a single point of failure or manipulation. Each oracle node which provides the data will use multiple sources of the information to ensure it is correct and the operators of these nodes will be paid with the Chainlink token, providing incentive to correctly manage and provide the requested data.
If Chainlink succeeds, which is not 100% guaranteed, it could be the company which finally connects the outside world to secure smart contracts on different blockchains.
While Ethereum is one of the first and largest decentralized application platforms, that doesn’t mean it will always be so. As more and more people realize the powers of decentralization and the use cases of smart contracts you can expect to see more and more companies entering this space and trying to claim a piece of the pie.
As it stands though, Ethereum is currently head and shoulders above the rest due to first-mover advantage and benefits such as the Enterprise Ethereum Alliance which brings many large companies on-board with the tech and the fact that Ethereum has large numbers of developers already working on creating dApps and scaling the platform.
We have no doubt that many industries will be disrupted and improved by this technology, the question is, who will be the winners and how will Ethereum remain king of the smart contracts.